The Reserve Bank of Australia (RBA) has released a Consultation Paper as part of its ongoing Review of Merchant Card Payment Costs and Surcharging. This follows a public consultation process initiated with an Issues Paper in October 2024.
The Payments System Board has reached a preliminary view on several measures it believes are in the public interest. The board suggests removing surcharges on eftpos, Mastercard, and Visa cards. Currently, consumers pay approximately $1.2 billion annually in card surcharges. The RBA argues that surcharging is not achieving its intended purpose of encouraging more efficient payment choices. It notes that avoiding surcharges has become increasingly difficult as cash usage declines, businesses apply uniform surcharge rates across debit and credit transactions, and there are challenges enforcing current rules. Eliminating surcharging could simplify card payments, increase transparency, and boost competition in the card payments system.
Additionally, the RBA proposes lowering the cap on interchange fees paid by businesses, potentially saving them around $1.2 billion per year. It estimates that 90% of Australian businesses would benefit from these proposed policies, with small businesses seeing the most advantage as they tend to pay fees closer to existing caps. The introduction of caps on foreign interchange fees is also suggested to reduce costs for all businesses accepting international cards.
The RBA further recommends requiring card networks and large acquirers to publish their fee structures. This move aims to enhance transparency and competition, enabling all stakeholders to better understand their charges and facilitating easier comparisons for businesses seeking better deals.
Feedback on these proposals is invited by August 26, 2025. The RBA will use this feedback to finalize reforms aligned with its goals of maintaining a safe, competitive, and efficient payments system. Conclusions and an implementation timeline for any regulatory steps are expected by year’s end.
